and Mårten Palme
Mårten Palme: Dept. of Economic Statistics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Abstract: Sweden has experienced a sequence of tax and benefit reforms during the last decade. The purpose of this paper is to evaluate these extensive reforms from the points of view of labour supply, welfare and inequality. As a basis of the analysis, we use the household labour supply model, which is estimated using cross- section data from 1980. Simulation of the model reveals that tax and benefit reforms have led to a considerable reduction of the excess burden. Regarding inequality we are less conclusive, since these results depend on whether we define "income" as disposable income or money metric utility.
41 pages, May 1994
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